Yet data centers are making plans to significantly boost their energy use. In fact, projections from their own agency indicate that demand will nearly triple from 40 gigawatts today to an astounding 106 gigawatts by 2035. This dramatic increase is a sign of just how quickly the sector is growing. The unprecedented demand for data processing, particularly from artificial intelligence (AI) applications, is fueling this increase. The anticipated increase in energy demand highlights the challenges that regional electrical grids, such as those managed by PJM Interconnection, will face in maintaining reliability and affordability.
The big-picture reality The construction of new data centers likely isn’t going to let up anytime soon. In fact, over the next 10 years, new facilities alone will need almost three times the current electricity usage of the sector. Projections show that just new data center projects will use 2.7 times as much electricity as we currently use. This sudden and massive demand will further exacerbate strain on our current energy supply.
As future AI technology comes online, data center utilization rates are projected to increase from 59% to 69%. This increase is in line with the growing importance of AI training and inference. In reality, these tasks will soon represent close to 40% of overall compute capacity in data centers. Now, just over 10% of data centers use more than 50 megawatts of electricity. Fortunately, this statistic is about to improve dramatically. The typical new facility is projected to load in well over 100 megawatts.
Almost one out of four of all data centers will be over 500 megawatts in size. Many of these facilities may even exceed the lofty 1-gigawatt threshold. This trend is indicative of a much larger trend towards mega data centers that can absorb greater loads. Some early-stage data center projects have more than tripled from early 2024 to early 2025. This increase shows strong growth and potential throughout the nation.
The PJM Interconnection region, which oversees electrical grid operations in several states including Virginia, Pennsylvania, Ohio, and New Jersey, is particularly affected by this rapid expansion. Data hubs in this metro area have been singled out as major drivers of increased electricity costs. As these facilities continue to grow in number and size, they create new stresses on the grid’s infrastructure.
“PJM is required to establish a load queue. PJM remains deeply committed to delivering reliability. They do have the authority to make life difficult for large new data center loads by making them wait to join the system until such time as they can be served reliably.
Concerns have been raised about PJM Interconnection’s capability to effectively manage this unprecedented influx of energy demand. A recent complaint filed with the Federal Energy Regulatory Commission (FERC) emphasized that PJM must ensure adequate grid capacity before allowing new data center connections. Monitoring Analytics stated, “PJM’s failure to clarify and enforce its existing rules and to protect reliable and affordable service in PJM is unjust and unreasonable.”
This projected energy demand growth is a significant downgrade from previous projections released in April. It’s worth noting that many data center projects average seven years to get launched. Additionally, changes made in earlier stages will have a large effect on later forecasts.